XML Interoperability & Convergence ISO XML Working Group (WG 10) XML on Wall Street November 20th, 2001 John Goeller

2 November 8 th, 2001 Is Interoperability Achievable? Standards Development Leveraging New Technology Business Modeling – Unified Modeling Language (UML) XML - Evolving Existing Standards - Creating New Standards Standards Repository Expanding Asset Class Coverage Focusing on Market Practice

Interoperability or Convergence?

4 November 8 th, 2001 Is Interoperability Achievable? Standards Landscape PRE-TRADE TRADE POST-TRADE SETTLEMENT POST SETTLEMENT /PRE-SETTLEMENT Equities Fixed Income Exchange Traded Derivatives OTC Derivatives F/X Mutual Funds/ Unit Trusts 15022

5 November 8 th, 2001 Is Interoperability Achievable? Standards Complexity: Post-Trade – Pre-Settlement FIXSWIFTGSTPAOmgeo Field SideIndicatorBuy/Sell Indicator Values 1=Buy 2=Sell 3=Buy Minus … BUYI=Buy SELL=Sell BUYI=Buy SELL=Sell BUYI=Buy SELL=Sell Syntax 54=1 or :22a::/BUSE// BUYI BUYI BUYI Codes Proprietary plus ISO Codes ISO Codes Proprietary plus ISO Codes

Does XML Solve Securities Standards Interoperability Issues?

7 November 8 th, 2001 Is Interoperability Achievable? XML Doesn’t Solve Interoperability Quoi? Do you like XML?......

Industry Solutions: ISO XML Working Group WG 10

9 November 8 th, 2001 Is Interoperability Achievable? WG 10 Mission Statement Evolve ISO to permit migration of the securities industry to a standardized use of XML, guaranteeing interoperability across the industry and with other industry sectors, particularly but not restricted to the financial industry.

10 November 8 th, 2001 Is Interoperability Achievable? Current ISO What included in the ISO standard? Part 1: Data field and message design rules and guidelines Part 2: Maintenance of the Data Field Dictionary and Catalogue of Messages What’s not included in the ISO Standard?  Data Field Dictionary (DFD)  Reference Table of Multiple Syntaxes  Catalog of Messages

11 November 8 th, 2001 Is Interoperability Achievable? WG 10 Overview WG 10 S.W.I.F.T. Standards Methodology Other Methodologies: ebXML HL7 ISO Recommend- ations Standards Repository Existing Message Sets ISO DFD

12 November 8 th, 2001 Is Interoperability Achievable? WG 10’s Focus WG 10 is creating a framework to establish agreement on how we develop, implement and store securities industry standards Four Building Blocks Applying Business Modeling to Standards Development Harmonizing the Use of XML Implementing a Centralized Standards Repository Leveraging Industry Coordination

13 November 8 th, 2001 Is Interoperability Achievable? WG 10’s Three Streams of Work Design RulesRegistry/Repository UML Business Modeling Guidelines UML to XML Design Rules Organization of Repository Procedures to register business models and XML Schemas Reverse engineer existing message sets to business model Reverse Engineering UMLXML Schema UML Standards Repository Note: A 4 th Project Project Team handles industry liaison Unified Modeling Language (UML) is a visual modeling language for capturing knowledge (semantics) about a subject and it is applied to modeling and systems.

14 November 8 th, 2001 Is Interoperability Achievable? WG 10 Objectives & Scope of Activities 1) Update the ISO Standard Draft New Standard - ISO Part 1 - ISO Part 2 - Supporting Documents Circulate to ISO Member Countries Finalize and Publish International Standard 2) Create the Standards Repository

15 November 8 th, 2001 Is Interoperability Achievable? FIX Protocol Limited (FPL) and WG 10 FPL jointly announced with SWIFT that they will support the efforts of WG 10 Agreement focused on the convergence of their respective messaging protocols around the adoption of ISO XML FPL has formed the ISO XML Working Group Participate in WG 10 on behalf of FPL Ensure that the functionality offered by FIX messages are fully integrated into the ISO XML repository Integrate into WG 10 Structure Recent Activity October 2001 – New York WG 10 Review Session November New York Pre-Trade/Trade Working Session

16 November 8 th, 2001 Is Interoperability Achievable? ISO Standards Repository Repository will be divided by meaningful segments Standards Management Groups (SMG) will be responsible for segments of the repository

17 November 8 th, 2001 Is Interoperability Achievable? Registration Management Group Standards Management Group User Community Standards Management Group User Community Registration Authority Standards Management Group User Community Proposed ISO Standards Environment Web - Site

18 November 8 th, 2001 Is Interoperability Achievable? Two Levels of Interoperability/Convergence Standards Development Using Business Analysis and Design Techniques Agreeing on a Common Set of XML Design Rules Establishing a Standards Repository which will contain the Components of the Standards Standards Implementation Supporting the migration to the new standards Does the Benefit of Migrating to the New Standards Outweigh the Switching Costs?

19 November 8 th, 2001 Is Interoperability Achievable? WG 10 Challenges General Issues Agreement is difficult Existing standards groups must consider their installed base - Vendors that support the standard’s growth - Potential switching costs WG 10 Specific Issues Business Modeling – Unified Modeling Language (UML) - New Technology/Concepts Standards Repository - Governance Issues - Intellectual Property XML - Implementation Changes

20 November 8 th, 2001 Is Interoperability Achievable? Single XML Vocabulary? It is a matter of… Timing Organizations need to decide when they can migrate to this new way of developing standards Education Organizations need to understand/utilize the standards methodology Governance Organizations need to understand their role in future standards development through the standards repository

21 November 8 th, 2001 Is Interoperability Achievable? WG 10 Next Steps October, Circulate Drafts to WG 10 Members November, Complete WG 10 Review December, Circulate Drafts to ISO Member Countries Late 2001 to Mid Create Initial Standards Repository Current Coverage of ISO Data Field Dictionary and Catalog of Messages FIX Protocol Collective Investments Vehicles

22 November 8 th, 2001 Is Interoperability Achievable? Conclusion  Standards  Lots of Initiatives  T+1 Implications  The Securities Industry needs to focus on the Post-Trade to Pre-Settlement standards overlap  Interoperability/Convergence  WG 10 is working on a solution  Challenges  Timing  Education  Governance